Kentucky Poker, Gambling and Casino Laws

When most people think of the state of Kentucky, one of the first things that comes to mind is horse racing. Every year thousands of spectators from all walks of life convene under the famous Twin Spires at Churchill Downs to watch the Kentucky Derby. An enormous betting handle is guaranteed as race fans place their bets on which horses will win, place, and show. With its rich history of horse racing and the wagering that goes along with it, residents of the Bluegrass State may be scratching their heads after the Kentucky legislature shot down a February 2018 bill that would have let Kentucky voters decide in the November 2018 election whether to allow as many as seven casinos to open in the state.

Even after the bill’s proponents showed that Kentucky residents spent about $450 million in 2011 on gambling in other states, the Senate voted 21-16 against the bill, effectively silencing the effort once again to bring casino gambling to the Bluegrass State. While some legislators cited the state’s laws forbidding gambling in voting against the measure, others, such as Sen. Walt Blevins (D), said the state’s dwindling economy would have benefitted had some of the money that Kentucky residents spend in neighboring states’ casinos remained within Kentucky. “If we don’t get an infusion of revenue, we’re going to continue to see this state go down and down and down,” Blevins said.[1]

The bill’s defeat drew the ire of Gov. Steve Beshear, who supported the proposed amendment. Beshear blamed the bill’s failure on Senate President David Williams. Williams refused to wait to hold the vote one more day, even though one of the pro-gambling senators who was expected to vote in favor was not present. Williams defended himself, saying that if the vote had looked like it had 22 in favor of the bill–it needed 23 for passage–he would have reopened the vote. But the bill had just 16 yes votes, and Williams stood firm on moving forward with the vote as was scheduled. Beshear said he was disappointed in the legislators who said they were in favor of letting the public decide the measure in a November referendum, but voted against it anyway.

However, the bulk of his anger was targeted at Williams. “I am also disappointed that Senator Williams chose to sabotage the chance for our citizens to decide by scheduling the vote for today, when he knew that a senator who planned to vote ‘yes’ would not be in town,” Beshear said. Sen Damon Thayer, who introduced the bill, warned his fellow senators that by not passing the measure, the state’s already-struggling horse industry would continue to suffer at the hands of surrounding states that were doing their best “to knock Kentucky off its pedestal as the horse capital of the world.”[2]

While the bill appears to be dead for the 2018 session, polls conducted by racetracks and the Kentucky Republican Party showed that 80 percent of voters in the Bluegrass State were in favor of a casino gambling referendum on the November ballot. Despite that percentage, University of Kentucky political science professor Stephen Voss thinks public disappointment will linger for a little while, but eventually that same 80 percent may lose interest and move on. “When you talk about the electorate … very few care so much about gambling that it’s going to govern their vote,” Voss said. “I just don’t believe there is that deep support for casino gambling as an issue.”[3]

Another anti-gambling move occurred at the end of March when a Kentucky judge ordered the forfeiture of 132 online gambling sites to state control. Gambling via the Internet is considered illegal in Kentucky. The ruling was the most recent action in the four-year-old civil lawsuit that accuses online gambling sites of “providing online gambling services” to Kentucky residents. State representatives called the sites “illegal gambling devices,” which led the way for the state to take control.[4]

The Kentucky Derby And The History Of Horse Racing And Gambling In The Bluegrass State

On May 17, 1875, Col. M. Lewis Clark watched Aristides win the first Kentucky Derby before approximately 10,000 spectators. It is unlikely that Clark or anyone who saw the first “Run for the Roses” knew that the race would still be running 137 years later. Clark also brought pari-mutuel machines to Churchill Downs in 1878, but bookmakers convinced Clark that the machines were taking revenue away from them. It wasn’t until 1883 that the track was dubbed Churchill Downs by a Louisville newspaper, and it wasn’t until 1937 that Churchill Downs was incorporated, and it’s been racing thoroughbreds ever since.[5]

With the Kentucky Derby as a potent backdrop, pari-mutuel betting was the only legal form of gambling Kentucky residents had until the summer of 1988 when Gov. Wallace G. Wilkinson appointed the Kentucky Lottery Commission to create a draft for a state lottery in Kentucky. Voters passed the measure with 60 percent of the vote in November, and by mid-December Gov. Wilkinson signed the lottery bill into law. Not only was it historic for Kentucky, but it also had the distinction of being the first lottery in America that was put into place as a corporation.

By February 1989, the Kentucky Lottery board of directors was in place, a president of the Kentucky Lottery Corporation was selected, and Louisville was chosen as the lottery’s headquarters. The first ticket was sold on April 4, 1989. Lottery ticket sales brought in $27 million in the first week of operation. By August, the Kentucky Lottery again showed its trailblazing spirit by giving the green light to nontraditional pricing for online lottery tickets. By September, 1,000 online ticket machines were installed all over the state. After one year in operation, Kentucky Lottery Corporation members boasted $266 million in sales, $66 million more than originally expected.

The lottery’s continued success enabled it to join LOTTO*AMERICA, an online lottery game played across multiple states. Many state programs have benefited from lottery proceeds since its inception 23 years ago, such as the Kentucky Early Childhood Reading Incentive Fund, the Kentucky Housing Corporation’s Affordable Housing Trust Fund, and the Kentucky Educational Excellence Scholarship Program. The Kentucky Lottery has poured in more than $3.5 billion to the state treasury since the lottery’s start in 1989.[6]

Prospect Of Casinos Or Online Gambling In Kentucky Not Promising At Present

If the February 2018 Senate vote is any indication, the likelihood of casinos opening in Kentucky anytime soon is not very good. The split Senate may keep the issue down for the foreseeable future, as casino proponents were seven votes shy of what they needed to keep the measure alive. But if bordering states continue to draw Kentucky residents away to gamble, lawmakers will have to do something to keep from losing hundreds of millions of dollars each year that Kentuckians wager elsewhere. With legislators still haggling about opening brick and mortar casinos, there has been no talk of online gambling legislation whatsoever.